The installment loan for procuring a flat is a lifesaver for homebuyers who have not the full amount to acquire a dwelling they like; instead, they expect to receive the missing amount in a relatively short period of time. With all the perks the deal opens, an installment loan is nothing but the best solution you may ever have. However, there are some nuances with getting loans for first-time house buyers. Learn more about the legal intricacies of purchasing an apartment by acquiring loans and avoiding unpleasant surprises.
What Is Special about Buying a Home with an Installment Loan?
The main idea of the installment loan is that you do not pay the total price for the house you are procuring. Of course, the procedure of obtaining such a service of first time home buyer loans is rather serious. Here are some of the benefits you get once your request for the loan is approved:
- When concluding an agreement, a large number of documents are required: IDs, insurance agreements. Besides, you will also need to fill out a questionnaire about your source of income, provide a certificate of income confirmation, etc.
- With a mortgage loan, there are hidden commissions, in addition to the loan interest which drastically increases the cost to be covered. As a rule, the percentage does not exceed 10 if you make an installment contract. In the meantime, there are no extra fees.
- In the case of mortgage lending, the agreement is signed for the term of 20-25 years. So it may be possible to cover the loan ahead of the schedule, and some banks retain an early repayment fee. The installments are usually calculated for 6-8 years, and it is also possible to cover the debt ahead of the schedule without any additional fees.
- In the case of mortgage lending, it is almost impossible for a borrower to acquire an additional loan from a bank to pay off current liabilities if he has financial difficulties. It is good if you have someone to borrow from, and if not, then you have to contact other credit organizations, whose interest on loans greatly exceeds that of banks. The only privilege that a bank can provide to you in this situation is the delayed repayment.
As you can see, the procurement of real estate using the installment loan is an extremely important deal. Ignorance of the elementary nuances can lead to both the loss of money and the loss of housing. Therefore, it is necessary to approach the business with full responsibility. In any case, it is not that difficult to buy a dwelling, even if you don’t have the full sum to cover the total price. There is still a solution, which you should carefully use.